Search form

You are here

The Newspaper Bundle Doesn’t Make Sense

While I agree with almost everything Steve Yelvington has written about the news business, I do want to take issue with one thing: I think assuming long-term profitability of smaller papers is whistling past a pretty big graveyard, for several reasons.

First, the internet businesses that provide better service at less cost for markets like classifieds, jobs, and matchmaking have started in the largest urban areas first, for obvious reasons, but their economies of scale suggest that they have simply not colonized smaller conurbations yet. They’re coming; it’s just that Chillicothe gets Craigslist later than Chicago.

Second, news is not a small set of independent local businesses, like farmers’ markets. It’s an ecosystem, and the big papers subsidize huge parts of what appears in the smaller papers, providing disproportionate support for everything from the AP to opinion columnists to movie reviews. With enough suffering from the big papers, the smaller papers will no longer benefit from these subsidies.

Third, the lure of city living has returned to the nation’s youth, spurred in part by the net, which makes it much easier to explore possible job opportunities and housing options remotely. As a result, towns of progressively smaller populations have, ceteris paribus, residents of progressively advanced age. Since reading a newspaper is an old-person activity, the smaller the town, the higher the per capita consumption of papers (again, c.p.) This delays but does not dismantle the implacable logic of subscription loss. (Someone recently tweeted that small-town papers should rename their local obituaries “Subscriber Countdown!”)

Fourth, and finally, the grim reaper: the bundle that is the newspaper doesn’t make any sense. Box scores and soup recipes and Mark Sanford’s political woes and IBM’s closing price and a review of Taylor Swift’s new album don’t actually have any coherent rationale for being delivered together. All of those things went into the paper because print and distribution costs meant that the publisher added whatever content would cost marginally less than it would generate in display ads, a calculation that had nothing to do with coherence of bundled content and everything to do with industrial economics. Which economics do not translate to the web.

2009 is plainly the year of the Metro Dailies’ nabka, but the relative freedom from crisis felt by the smaller papers is, I believe, likelier to be a mere postponement of the same issues, rather than a stay of execution.

Also from This Issue

In his lead essay, Clay Shirky argues that the old models of journalism are broken primarily because in today’s online environment, self-created publics can parse the news however they like. The biggest failure of journalism in the online age is the failure to reproduce the front page – the news that everyone saw together and first. Today, individuals who want specialized or even personalized news can get it instantly. Readership has become impossible to control.

In this massive upheaval, one thing that may be at risk is the provision of “serious” journalism – news stories about the city council, or about events on the other side of the globe. These stories aren’t being subsidized anymore, as they had been in the past, by getting bundled in with coupons and stories about sports. To provide serious journalism, new forms of patronage may be necessary, and Shirky’s essay concludes with a brief look at some models that may work. Yet no upheaval of this magnitude is really predictable, and the future will probably surprise us all.

In his response essay, Philip Meyer argues that while newspapers may be in financial trouble, journalism is on the move. In particular, citizen journalism, done by individuals who may have other careers or life paths outside of full-time journalism, is a key trend for the future. Certification for these journalists – whether through reputation metrics or through a formal certification process – will become increasingly important. Evidence-based journalism, specialty niche journalism, and journalism done through philanthropic foundations are some of the other key trends that are accompanying the decline of the generalist newspapers that dominated the twentieth century. Evidence-based journalism is more open to ordinary citizens, who may not have the contacts of traditional newspaper reporters. Niche journalism had a hard time finding an outlet in the old days. And, although the prospect may be unsettling, philanthropy is increasingly an important source of funding for these projects.

Paul Starr agrees with much of Clay Shirky’s lead essay, but he is not optimistic about the power of the public to self-organize. He argues that law, politics, and the unequal fortunes of people in society will all influence the process, and that this means that if we want responsible public-service journalism, we will likely have to subsidize it in a viewpoint- and platform-neutral manner, perhaps with tax exemptions.

Steve Yelvington argues that much of the hype about the death of the newspaper business is simply the product of journalistic myopia, in two different forms: First, the news business as a whole made a series of bad business decisions that left it ill-prepared for the information age. And second, the effects of these decisions are all too apparent to reporters, who see them up close in their professional lives. Yet let’s be skeptical of the claim that the newspaper is dying, he says: We are in the middle of a very serious recession, and many other industries are also suffering. No one, however, suggests that we will stop banking, say, or driving cars. Tax breaks, subsidies, bailouts, and laws forbidding hyperlinks to copyrighted content are not only unnecessary – they are harmful, because they will prevent the news industry from developing the new strategies it desperately needs.

Disclaimer

Cato Unbound is a forum for the discussion of diverse and often controversial ideas and opinions. The views expressed on the website belong to their authors alone and do not necessarily reflect the views of the staff or supporters of the Cato Institute.